WASHINGTON (AP) - North Korea may be preparing for its third nuclear test, a show of defiance as the United Nations considers new sanctions on the dictatorship for conducting an underground nuclear explosion in May, according to a U.S. government official.

North Korea conducted an underground explosion on May 25, its first since a 2006 atomic test. The official, who spoke Thursday on condition of anonymity in order to discuss the unreleased information, would not provide details regarding the assessment.

A draft U.N. resolution proposed Wednesday would impose tough sanctions on North Korea's weapons exports and financial dealings and allow inspections of suspect cargo in ports and on the high seas. North Korea has threatened to retaliate if new sanctions are adopted.

North Korea already is a pariah to many countries and has been under tough economic sanctions for years. Last month's reported test defied a Security Council resolution adopted after the North's first underground atomic blast in October 2006.

The White House National Security Council would not comment on the assessment of a possible third nuclear test in the works.

"We have come to expect North Korea to act recklessly and dangerously," NSC spokesman Mike Hammer said in a statement. "But while the world unites to pass a strong new Security Council resolution, it is clear that North Korea's behavior is succeeding only in further isolating itself."

President Barack Obama's special envoy on North Korea, Stephen Bosworth, said Thursday that the United States is determined to make sure the North faces serious consequences for its growing missile and nuclear threat.

Bosworth told lawmakers at a hearing that the Obama administration is considering freezing North Korean accounts at banks outside the country. Similar action by the George W. Bush administration infuriated the North and effectively severed it from the international financial system and led to a breakdown in nuclear talks.

But Bosworth also said Obama wants to talk to Pyongyang, either through the six-nation mechanism or directly.

North Korea has so far spurned the administration's attempts at engagement, Bosworth said. The North will come back to disarmament talks eventually, he said, but not soon.

For now, Bosworth said, North Korea will "suffer consequences if it does not reverse course."

Also on Thursday, CIA Director Leon Panetta said U.S. intelligence agencies are watching North Korea very closely in hopes of detecting or preventing North Korea's sale of nuclear and missile expertise and technology "to anyone willing to pay."

North Korea is a hard target to spy on but "we are making good progress," Panetta said.
The administration's approach to confronting North Korea will be an "important signal" for how it will deal with Iran if it continues to pursue nuclear weapons, he said.

The United States accuses Iran of secretly trying to develop atomic weapons. Iran denies the allegation.

In Brussels, Defense Secretary Robert Gates said there are no indications North Korea is making preparations for a military strike.
Gates says the Pyongyang regime is unpredictable, however, so he does not dismiss the threats.